Should You Consider Land Foreclosures as Viable Options for a Real Estate Investment?
Land foreclosures are considered some of the most flexible and appealing options for investing. Also, according to many experts, they are among the cheapest real estate properties you can think of investing in, if you don’t have enough money at first to spend on expensive homes or commercial real estate properties.
The greatest advantage of land foreclosures is their low cost. Buying land is already a lot cheaper than buying a house or virtually any lot that has a type of building or structure on its premises. However, foreclosed lots are even more affordable, and you don’t have to worry about the site being destroyed or vandalized, since in most cases there won’t be anything to destroy.
Another reason why land foreclosures are appealing is that the competition between investors interested in them is not as fierce. So, as an investor you can take your time searching for the best lot, and weigh your options carefully instead of hurrying to try to provide the lender with the best offer.
Finally, probably the most strategic advantage of buying foreclosed land is that you have a lot of excellent options on what you can build on it. Whether you want to build a ranch, a large mansion or a warehouse for storing goods, an appropriately sized and situated empty lot will provide you with what you need. Even better, larger areas of foreclosed land that have the potential to become ripe farmland can give you an amazing number of options regarding what you can build and how much (or how little) you might want to invest in the construction project.
Is It Really Wise to Spread Out Your Capital?
Buying foreclosed land can seem like a good idea at first. However, for investors who don’t have a long term strategy in using the land properly, such an investment can quickly turn into a dead end. So, before you consider going to a land foreclosure auction, think carefully about what you want to do with the land. Visit the place in person, examine it and have an agricultural expert at your side who can tell you about the potential crops you could plant and the amount of money you’d have to invest long term. That way, you will have a clear picture on how much you can spend and where to draw the line.
Spreading out your capital by first investing in the land and then slowly adding more money to the investment project by building structures and bringing in extra hands and equipment to take full advantage of the land you’ve bought is essential to a successful investment. Being active like that will provide you with a clear edge and may end up increasing your profits tenfold over a period as short as 6 months.
Depending on the plan you have in mind and the people you talk to, such a prospect can be extremely fruitful, as long as you keep track of all the possible pitfalls and challenges that can still occur during the foreclosure process – as it can in the case of any other real estate deal as well.